gates

When it comes to tackling big problems with bold aims, the Bill & Melinda Gates Foundation is in a league of its own. Unconstrained by the typical limitations encountered by traditional development organisations and with a great deal of capital at its disposal, the foundation believes it can make a significant contribution to ending poverty, reducing the impacts of climate change and improving standards of healthcare and education around the world.

Agriculture is a pathway out of poverty, because farming is the main source of income for more than a billion people facing poverty, particularly women, says the foundation’s director of agriculture since 2017, Nick Austin FAICD. Most of these farmers practise “smallholder” agriculture — typically involving the cultivating of crops and/or raising livestock on relatively small parcels of land.

The Gates Foundation’s agriculture investments include support for innovative solutions to the challenges facing poultry farming in sub-Saharan Africa and India, which are limiting the potential of poultry production to provide a sustainable source of income for poor households. Village chickens play an important role for poor rural communities. They are an asset often controlled by women — and the eggs and meat they provide are a vital source of nutrition and income for the entire family. But maintaining healthy animals can be a struggle. For example, a viral illness called Newcastle disease (NDV) regularly wipes out entire domestic poultry flocks in countries where there is not regulated disease control.

Drawing on insights from Australian researchers, livestock scientists have produced a vaccine for Newcastle disease that is affordable and easily transportable. The key obstacle was how to produce large quantities of the vaccine and make it available to tens of millions of small- scale producers.

The Gates Foundation initiated a partnership with Hester Biosciences, one of India’s leading animal healthcare companies, to build a manufacturing facility in Nepal to supply the Asia and Africa market, and then develop product delivery networks. A successful business model has been created that no longer depends on donor or government funding. Figures from the Global Alliance for Veterinary Medicines (for the Indian states of Odisha, Chhattisgarh and Jharkhand, plus Nepal) reveal the annual net economic benefit of Newcastle disease vaccine for small-scale producers grew from $700,000 in 2015 to approximately $17m in 2018.

Hester has also trained women known as pashu sakhis (“friends of the animals” in Hindi) in vaccination, de-worming and farm hygiene practices. They are then empowered to use these skills to earn extra money. The foundation has now turned its attention to supporting Hester in Africa, investing in R&D and an animal vaccine manufacturing facility in Tanzania, scheduled to open this year. “We incentivise companies to work with the right local partners to create an ecosystem of businesses,” explains Austin. “That allows us to eventually step away from it because it is self-sustaining.”

Strategic thinkers

Overall investment decisions are made annually by the foundation’s co-chairs and trustees, Bill and Melinda Gates, and its trustee, investor Warren Buffett. “It’s an accountability process that’s a core part of the foundation’s DNA,” says Austin. “We don’t have annual earnings or profit and loss statements a business might have, or senate estimate hearings of governments. The process is largely bespoke to a foundation that capitalises on the fact it is led by two of the smartest people on the planet.”

The foundation’s annual strategy review involves Bill and Melinda, plus CEO Mark Suzman. “The conversation is about what we have achieved over the past year, what we have learned and what we will do differently,” says Austin. “Also how we’re tracking progress and whether we have evidence our theories are being proven on the ground. Once the strategies are approved, our teams are expected to execute against those strategies — there is no micromanaging. We have incredible autonomy for the decisions we make.”

Austin says before he joined the foundation in 2017, he had not anticipated the Gates would be so personally invested in the foundation’s work. “Bill and Melinda have devoted almost every waking hour to the global health response to COVID-19 this past year, but we’ve still had an incredible amount of airtime with both of them,” he says. “They come from a product development background, which gives them a real desire to understand how we can do things quicker, smarter and with greater impact. They continually push you to evolve — your last best achievement is your current expectation going forward. Bill, particularly, has a habit of asking questions you wish you’d asked yourself before you walked into the room.”

In it for the long haul

The foundation can make investments other development sector players shy away from for a variety of reasons. Austin says that there is a tendency in the development sector to focus on achieving short-term goals — and quite a low appetite for risk. That when a new government is ushered in, this tends to come with a fresh set of priorities, so funding can often then be stopped or reduced.

“If something hasn’t proven itself in five years, there aren’t many investors in the development sector who’ll say, ‘we’ll give it another five’, says Austin. “Whereas, we’ve got a number of investments that are coming up to 15 years and we still aren’t sure if they’ll deliver — but they’re significant enough that if they do, it will benefit millions of people.”

The Gates Foundation was established in 2000, and Austin says that like any young organisation, the way it works is still evolving. For example, the foundation invests upwards of US$100m a year into its development partner, CGIAR. It is the world’s largest agricultural research organisation and Austin was its interim executive director. Formerly called the Consultative Group on International Agricultural Research, until recently, CGIAR was comprised of 15 independent centres — with 15 different boards and strategies. The organisation has now been merged into one common board and one strategy, with a pooled funding arrangement.

The Gates Foundation is in the process of moving away from funding individual CGIAR grants to supporting pooled funding. This will ensure its investments align with CGIAR’s strategic goals, with the system given the autonomy it needs to achieve them.

“Historically, it was much more piecemeal approach and that led to research programs being dragged in different directions and missed opportunities to more efficiently collaborate,” says Austin. “There were many small investments that generated multiple transaction costs. The system is now being modernised, for want of a better word. The greater strategic clarity and unified mission we are now seeing from CGIAR has been really important to the process and should help its incredible research teams achieve even greater impact.”

“Once the strategies are approved, our teams are expected to execute against those strategies — there is no micromanaging. We have incredible autonomy for the decisions we make.”

Nick Austin FAICD

New ways of working

The foundation works through partners and grantees. For example, Austin sits on the board of the Alliance for Green Revolution in Africa (AGRA), part-funded by the Gates Foundation and chaired by the former Ethiopian prime minister Hailemariam Desalegn (former UN Secretary-General Kofi Annan was AGRA chair 2006–13). Its board includes two other former African heads of state and notable business leaders and scientists. Due to COVID-19, the foundation’s staff have been working from home since March 2020, but Austin says technology has provided unexpected opportunities.

“If you had a meeting with an African leader, it was previously disrespectful if you didn’t travel to the country to attend,” says Austin. “It has become easier to schedule significant meetings... remotely so we’re not putting jet planes in the sky and adding to greenhouse gas emissions.”